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S4596 - Details

S4596 - Summary

Relates to limitations on investments of public pension funds.

S4596 - Sponsor Memo

BILL NUMBER: S4596
TITLE OF BILL : An act to amend the retirement and social security
law, in relation to limitations on investments of public pension funds
PURPOSE :
To direct the State Comptroller to divest the New York State Common
Retirement Fund from companies engaged in the production of fossil
fuels.
SUMMARY OF PROVISIONS :
Section 1: Names the bill.
Section 3a: Amends the Retirement and Social Security Law to prohibit
the State Comptroller from investing monies of the Common Retirement
Fund in of the top 200 companies that hold the largest carbon content
fossil fuel reserves. Divestment from coal companies must be completed
within one year; divestment from all other fossil fuel companies must
be completed by January 1, 2020.
Section 3b: Permits the Comptroller to cease divestment or reinvest in
previously divested companies if he/she can demonstrate that as a
direct result of such divestment the Fund has become or shall become:
(i) equal to or less than 99.5 per cent; or (ii) 100 per cent less 50

basis points of the hypothetical value of all assets under management
by, or on behalf of, the Fund assuming no divestment from any company
had occurred.
Section 3c: Requires the Comptroller to identify all companies subject
to divestment in which the Fund has holdings, and to report annually
on the progress of divestment.
JUSTIFICATION :
Climate change is a real and serious threat to the health, welfare and
prosperity of all New Yorkers. Maintaining the status quo of fossil
fuel energy production will unquestionably lead to a self-created
catastrophe. Therefore the State of New York has a responsibility to
take steps to avert this disastrous result. Divesting the New York
State Common Retirement Fund from all investments in fossil fuels, as
mandated by this legislation, is far from a silver bullet, but it is
one important step among many necessary to move our climate away from
the precipice.
The consensus of change will lead and droughts, as loss of critical
integrity of our the international scientific community is that
climate to rising sea levels, increasingly intense storm events well
as threats to global water and food supplies and biodiversity,
threatening lives, livelihoods and the society. Among the risks New
York faces are:
*Harm to human health and safety
*Increasing healthcare costs
*Increasing costs to municipalities and local governments
*Higher insurance costs
*Loss of property value
*Contamination of water and soil
*Deforestation
*Loss of wetlands
*Losses to agriculture, fisheries, and tourism
*Destruction of homes and displacement of families and communities
The 2009 Copenhagen Accords stated that an increase in global average
temperature of more than 2i C would lead to an unsafe risk of
irreversible climate change. In order to stay below 2i C, there is a
limit to the amount of carbon dioxide emissions that can be released
globally through the burning of fossil fuels - 886 Gigatons between
the years 2000 and 2050. 321 Gt have been burned from 2000 to 2010,
leaving a remaining carbon budget of approximately 565 Gt. Currently
proven fossil fuel reserves belonging to private and public companies
total an overwhelming 2,795 Gt of potential emissions, not including
as-yet undiscovered reserves that fossil fuel companies spend billions
of dollars each year to find. This means that in order to avoid
causing catastrophic climate change, at least 80% of all current
proven coal reserves, half of gas reserves and one third of oil
reserves must stay in the ground.
The State Common Retirement Fund, with an estimated value of over $180
billion, invests at least $5.12 billion in public pension money in
companies that mine, drill and produce fossil fuels. The CRF is one of
the largest and most visible institutional investors in the world. By
divesting from fossil fuels, the CRF will send a message that it is
unacceptable for any institution to profit from activities that
threaten the future of our society, and will begin the process of
delegitimizing a business model that, while financially profitable in
the short run, is socially and morally bankrupt. As a state we cannot
commit to the steps necessary to prevent climate change while
maintaining a financial interest in companies whose profits depend on
the continuation of practices that cause climate change. As Upton
Sinclair wrote, "it is difficult to get a man to understand something
when his salary depends on his not understanding it."
The Office of the State Comptroller has made a significant effort to
use stockholder engagement to influence the actions of
climate-damaging fossil fuel companies. However, these companies have
largely ignored entreaties from OSC and other institutional investors,
played down the threat posed by climate change, and scoffed at the
possibility of changing their way of doing business. In the end, the
profitability of fossil fuel companies is based solely on their
ability to supply far more carbon than the atmosphere can safely
absorb, a business plan that is at odds with physical reality, making
stockholder engagement a futile endeavor and demonstrating the
necessity of divestment.
Divestment is wholly in accord with the state's fiduciary
responsibility to protect the value of the pension fund. Numerous
business, financial and government leaders worldwide have warned that
investing in fossil fuel companies undermines the soundness of
investment portfolios, including the governor of the Bank of England,
Mark Camey; the President of the World Bank, Jim Yong Kim; and former
Treasury Secretary Henry Paulson. Given the growing understanding of
the reality of climate change and the increasing likelihood of
national and international action to reduce fossil fuel use, companies
whose value is based on unburnable carbon reserves risk rapid
devaluation as a result of these stranded assets. A prudent fiduciary
must also take into account the broader risk of economic and market
disruption posed by climate change, the evidence of which has already
been seen in the aftermath of Super-storm Sandy and other extreme
weather events. To further address concerns about meeting fiduciary
obligations, this bill contains a financial safety valve that would
permit the Comptroller to cease and/or reverse divestment if he or she
can demonstrate significant loss of value to the CRF as a direct
result of divestment.
This bill provides a five-year horizon for completion of divestment
from all fossil fuels (including coal, oil, and natural gas) in order
to maximize flexibility and minimize financial risk. However,
divestment from the coal industry in particular is an urgent financial
and environmental necessity, and it is therefore specially mandated to
occur within one year. The CRF has already lost over $100 million
through coal investments in the past three years at a time of
generally strong market growth, and those investments are not likely
to recover. Coal is one of the dirtiest, most carbon intensive sources
of energy, emitting more carbon dioxide per unit of energy produced
than oil or gas. Recent analyses have found that over 80% of worldwide
coal reserves, including 90% of US reserves, must stay in the ground
in order to stay below the 2f C limit.
In taking the responsible step of divesting from fossil fuels, New
York would take a leading role in a global movement that includes more
than 160 institutions and local governments, including The New School,
and Stanford and Syracuse Universities; the cities of Seattle, San
Francisco, Portland, Minneapolis, and Ithaca; the World Council of
Churches, and the United Methodist Church USA; Guardian Media Group
and the Rockefeller Brothers Fund; and the sovereign wealth fund of
Norway. Divestment is financially prudent, morally imperative,
responsible policymaking, and the time for action is now.
FISCAL IMPLICATIONS :
Undetermined
EFFECTIVE DATE :
This act shall take effect immediately.

S T A T E O F N E W Y O R K
________________________________________________________________________
4596
2017-2018 Regular Sessions
I N S E N A T E
February 21, 2017
___________
Introduced by Sens. KRUEGER, ADDABBO, COMRIE, DILAN, HAMILTON, HOYLMAN,
LATIMER, MONTGOMERY, PARKER, PERKINS, SERRANO -- read twice and
ordered printed, and when printed to be committed to the Committee on
Civil Service and Pensions
AN ACT to amend the retirement and social security law, in relation to
limitations on investments of public pension funds
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. This act shall be known and may be cited as the "fossil
fuel divestment act".
S 2. Section 423 of the retirement and social security law, as amended
by chapter 770 of the laws of 1970, is amended to read as follows:
S 423. Investments. [a.] 1. On and after April first, nineteen
hundred sixty-seven, the comptroller shall invest the available monies
of the common retirement fund in any investments and securities author-
ized by law for each retirement system and shall hold such investments
in his name as trustee of such fund, notwithstanding any other provision
of this chapter. Participating interests in such investments shall be
credited to each retirement system in the manner and at the time speci-
fied in [paragraph] SUBDIVISION two of section four hundred twenty-two
of this article.
[b.] 2. (A) To assist in the management of the monies of the common
retirement fund, the comptroller shall appoint an investment advisory
committee consisting of not less than seven members who shall serve for
his term of office. A vacancy occurring from any cause other than expi-
ration of term shall be filled by the comptroller for the remainder of
the term. Each member of the committee shall be experienced in the field
of investments and shall have served, or shall be serving, as a senior
officer or member of the board of an insurance company, banking corpo-
ration or other financial or investment organization authorized to do
business in the state of New York. The committee shall advise the comp-
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD05953-01-7

S. 4596 2
troller on investment policies relating to the monies of the common
retirement fund and shall review, from time to time, the investment
portfolio of the fund and make such recommendations as may be deemed
necessary.
(B) The comptroller shall appoint a separate mortgage advisory commit-
tee, with the advice and consent of the investment advisory committee,
to review proposed mortgage and real estate investments by the common
retirement fund. In making investments, as authorized by law, the comp-
troller shall be guided by policies established by each committee from
time to time; and, in the event the mortgage advisory committee disap-
proves a proposed mortgage or real estate investment, such shall not be
made.
(C) No officer or employee of any state department or agency shall be
eligible for membership on either committee. Each committee shall
convene periodically on call of the comptroller, or on call of the
chairman. The members of each committee shall be entitled to reimburse-
ment for their actual and necessary expenses but shall receive no
compensation for their services.
3. (A) NOTWITHSTANDING ANY PROVISION OF LAW TO THE CONTRARY, THE COMP-
TROLLER SHALL NOT HAVE THE POWER TO INVEST THE AVAILABLE MONIES OF THE
COMMON RETIREMENT FUND IN ANY STOCKS, DEBT OR OTHER SECURITIES OF ANY
CORPORATION OR COMPANY, OR ANY SUBSIDIARY, AFFILIATE OR PARENT OF ANY
CORPORATION OR COMPANY, AMONG THE TWO HUNDRED LARGEST PUBLICLY TRADED
FOSSIL FUEL COMPANIES, AS ESTABLISHED BY CARBON CONTENT IN THE COMPA-
NIES' PROVEN OIL, GAS AND COAL RESERVES. THE COMPTROLLER SHALL, IN
ACCORDANCE WITH SOUND INVESTMENT CRITERIA AND CONSISTENT WITH HIS OR HER
FIDUCIARY OBLIGATIONS, DIVEST ANY SUCH STOCKS OR OTHER SECURITIES WHETH-
ER THEY ARE OWNED DIRECTLY OR HELD THROUGH SEPARATE ACCOUNTS OR ANY
COMMINGLED FUNDS. DIVESTMENT PURSUANT TO THIS SUBDIVISION MUST BE
COMPLETED BY JANUARY FIRST, TWO THOUSAND TWENTY-TWO, WITH THE EXCEPTION
OF COMPANIES ENGAGED IN THE MINING, EXTRACTION OR PRODUCTION OF COAL,
DIVESTMENT FROM WHICH MUST BE COMPLETED NO LATER THAN ONE YEAR AFTER THE
EFFECTIVE DATE OF THIS SUBDIVISION.
(B) THE COMPTROLLER SHALL BE PERMITTED TO CEASE DIVESTING FROM COMPA-
NIES UNDER PARAGRAPH (A) OF THIS SUBDIVISION, REINVEST IN COMPANIES FROM
WHICH IT DIVESTED UNDER PARAGRAPH (A) OF THIS SUBDIVISION, OR CONTINUE
TO INVEST IN COMPANIES FROM WHICH IT HAS NOT YET DIVESTED UPON CLEAR AND
CONVINCING EVIDENCE SHOWING THAT AS A DIRECT RESULT OF SUCH DIVESTMENT,
THE TOTAL AND AGGREGATE VALUE OF ALL ASSETS UNDER MANAGEMENT BY, OR ON
BEHALF OF, THE COMMON RETIREMENT FUND BECOMES OR SHALL BECOME: (I) EQUAL
TO OR LESS THAN NINETY-NINE AND ONE-HALF PERCENT; OR (II) ONE HUNDRED
PERCENT LESS FIFTY BASIS POINTS OF THE HYPOTHETICAL VALUE OF ALL ASSETS
UNDER MANAGEMENT BY, OR ON BEHALF OF, THE COMMON RETIREMENT FUND ASSUM-
ING NO DIVESTMENT FROM ANY COMPANY HAD OCCURRED UNDER SAID PARAGRAPH (A)
OF THIS SUBDIVISION. CESSATION OF DIVESTMENT, REINVESTMENT OR ANY
SUBSEQUENT ONGOING INVESTMENT AUTHORIZED BY THIS SECTION SHALL BE
STRICTLY LIMITED TO THE MINIMUM STEPS NECESSARY TO AVOID THE CONTINGENCY
SET FORTH IN THE PRECEDING SENTENCE. FOR ANY CESSATION OF DIVESTMENT,
AND IN ADVANCE OF SUCH CESSATION, AUTHORIZED BY THIS SUBDIVISION, THE
COMPTROLLER SHALL PROVIDE A WRITTEN REPORT TO THE ATTORNEY GENERAL, THE
SENATE STANDING COMMITTEE ON CIVIL SERVICE AND PENSIONS, AND THE ASSEM-
BLY STANDING COMMITTEE ON GOVERNMENTAL EMPLOYEES, UPDATED SEMI-ANNUALLY
THEREAFTER AS APPLICABLE, SETTING FORTH THE REASONS AND JUSTIFICATION,
SUPPORTED BY CLEAR AND CONVINCING EVIDENCE, FOR ITS DECISIONS TO CEASE
DIVESTMENT, TO REINVEST OR TO REMAIN INVESTED IN FOSSIL FUEL COMPANIES.
S. 4596 3
(C) WITHIN SIXTY DAYS OF THE EFFECTIVE DATE OF THIS SUBDIVISION, THE
COMPTROLLER SHALL FACILITATE THE IDENTIFICATION OF FOSSIL FUEL COMPANIES
FROM WHICH THE COMMON RETIREMENT FUND IS REQUIRED TO DIVEST UNDER PARA-
GRAPH (A) OF THIS SUBDIVISION, AND FILE A COPY OF THIS LIST WITH THE
ATTORNEY GENERAL, THE SENATE STANDING COMMITTEE ON CIVIL SERVICE AND
PENSIONS, AND THE ASSEMBLY STANDING COMMITTEE ON GOVERNMENTAL EMPLOYEES.
ANNUALLY THEREAFTER, THE PUBLIC FUND SHALL FILE A REPORT WITH THE ATTOR-
NEY GENERAL, THE SENATE STANDING COMMITTEE ON CIVIL SERVICE AND
PENSIONS, AND THE ASSEMBLY STANDING COMMITTEE ON GOVERNMENTAL EMPLOYEES
THAT INCLUDES: (I) ALL INVESTMENTS SOLD, REDEEMED, DIVESTED OR WITHDRAWN
IN COMPLIANCE WITH PARAGRAPH (A) OF THIS SUBDIVISION; AND (II) ALL
PROHIBITED INVESTMENTS FROM WHICH THE COMMON RETIREMENT FUND HAS NOT YET
DIVESTED UNDER PARAGRAPH (A) OF THIS SUBDIVISION.
S 3. This act shall take effect immediately.

S4596A (ACTIVE) - Details

S4596A (ACTIVE) - Summary

Relates to limitations on investments of public pension funds.

S4596A (ACTIVE) - Sponsor Memo

BILL NUMBER: S4596A
TITLE OF BILL :
An act to amend the retirement and social security law, in relation to
limitations on investments of public pension funds
SUMMARY OF SPECIFIC PROVISIONS :
Section 1: Names the bill.
Section 3a: Amends the Retirement and Social Security Law to prohibit
the State Comptroller from investing monies of the Common Retirement
Fund in of the top 200 companies that hold the largest carbon content
fossil fuel reserves. Divestment from coal companies must be completed
within one year; divestment from all other fossil fuel companies must
be completed five years of the effective date of this subdivision.
Section 3b: Permits the Comptroller to cease divestment or reinvest in
previously divested companies if he/she can demonstrate that as a
direct result of such divestment the Fund has become or shall
become:(i) equal to or less than 99.5 per cent; or (ii) 100 per cent
less 50 basis points of the hypothetical value of all assets under
management by, or on behalf of, the Fund assuming no divestment from
any company had occurred.

Section 3c: Requires the Comptroller to identify all companies subject
to divestment in which the Fund has holdings, and to report annually
on the progress of divestment.
JUSTIFICATION :
Climate change is a real and serious threat to the health, welfare and
prosperity of all New Yorkers. Maintaining the status quo of fossil
fuel energy production will unquestionably lead to a self-created
catastrophe. Therefore, the State of New York has a responsibility to
take steps to avert this disastrous result. Divesting the New York
State Common Retirement Fund from all investments in fossil fuels, as
mandated by this legislation, is far from a silver bullet, but it is
one important step among many necessary to move our climate away from
the precipice.
The consensus of change will lead and droughts, as loss of critical
integrity of our the international scientific community is that
climate to rising sea levels, increasingly intense storm events well
as threats to global water and food supplies and biodiversity,
threatening lives, livelihoods and the society. Among the risks New
York faces are:
*Harm to human health and safety *Increasing healthcare costs
*Increasing costs to municipalities and local governments
*Higher insurance costs *Loss of property value
*Contamination of water and soil
*Deforestation
*Loss of wetlands
*Losses to agriculture, fisheries, and tourism
*Destruction of homes and displacement of families and communities
The 2009 Copenhagen Accords stated that an increase in global average
temperature of more than 2i C would lead to an unsafe risk of
irreversible climate change. In order to stay below 2i C, there is a
limit to the amount of carbon dioxide emissions that can be released
globally through the burning of fossil fuels - 886 Gigatons between
the years 2000 and 2050. 321 Gt have been burned from 2000 to 2010,
leaving a remaining carbon budget of approximately 565 Gt. Currently
proven fossil fuel reserves belonging to private and public companies
total an overwhelming 2,795 Gt of potential emissions, not including
as-yet undiscovered reserves that fossil fuel companies spend billions
of dollars each year to find. This means that in order to avoid
causing catastrophic climate change, at least 80% of all current
proven coal reserves, half of gas reserves and one third of oil
reserves must stay in the ground.
The State Common Retirement Fund, with an estimated value of over $180
billion, invests at least $5.12 billion in public pension money in
companies that mine, drill and produce fossil fuels. The CRF is one of
the largest and most visible institutional investors in the world. By
divesting from fossil fuels, the CRF will send a message that it is
unacceptable for any institution to profit from activities that
threaten the future of our society, and will begin the process of
delegitimizing a business model that, while financially profitable in
the short run, is socially and morally bankrupt. As a state, we cannot
commit to the steps necessary to prevent climate change while
maintaining a financial interest in companies whose profits depend on
the continuation of practices that cause climate change. As Upton
Sinclair wrote, "it is difficult to get a man to understand something
when his salary depends on his not understanding it."
The Office of the State Comptroller has made a significant effort to
use stockholder engagement to influence the actions of
climate-damaging fossil fuel companies. However, these companies have
largely ignored entreaties from OSC and other institutional investors,
played down the threat posed by climate change, and scoffed at the
possibility of changing their way of doing business. In the end, the
profitability of fossil fuel companies is based solely on their
ability to supply far more carbon than the atmosphere can safely
absorb, a business plan that is at odds with physical reality, making
stockholder engagement a futile endeavor and demonstrating the
necessity of divestment.
Divestment is wholly in accord with the state's fiduciary
responsibility to protect the value of the pension fund. Numerous
business, financial and government leaders worldwide have warned that
investing in fossil fuel companies undermines the soundness of
investment portfolios, including the governor of the Bank of England,
Mark Camey; the President of the World Bank, Jim Yong Kim; and former
Treasury Secretary Henry Paulson. Given the growing understanding of
the reality of climate change and the increasing likelihood of
national and international action to reduce fossil fuel use, companies
whose value is based on unburnable carbon reserves risk rapid
devaluation as a result of these stranded assets. A prudent fiduciary
must also take into account the broader risk of economic and market
disruption posed by climate change, the evidence of which has already
been seen in the aftermath of Super- storm Sandy and other extreme
weather events. To further address concerns about meeting fiduciary
obligations, this bill contains a financial safety valve that would
permit the Comptroller to cease and/or reverse divestment if he or she
can demonstrate significant loss of value to the CRF as a direct
result of divestment.
This bill provides a five-year horizon for completion of divestment
from all fossil fuels (including coal, oil, and natural gas) in order
to maximize flexibility and minimize financial risk. However,
divestment from the coal industry in particular is an urgent financial
and environmental necessity, and it is therefore specially mandated to
occur within one year. The CRF has already lost over $100 million
through coal investments in the past three years at a time of
generally strong market growth, and those investments are not likely
to recover. Coal is one of the dirtiest, most carbon intensive sources
of energy, emitting more carbon dioxide per unit of energy produced
than oil or gas. Recent analyses have found that over 80% of worldwide
coal reserves, including 90% of US reserves, must stay in the ground
in order to stay below the 2f C limit.
In taking the responsible step of divesting from fossil fuels, New
York would take a leading role in a global movement that includes more
than 160 institutions and local governments, including The New School,
and Stanford and Syracuse Universities; the cities of Seattle, San
Francisco, Portland, Minneapolis, and Ithaca; the World Council of
Churches, and the United Methodist Church USA; Guardian Media Group
and the Rockefeller Brothers Fund; and the sovereign wealth fund of
Norway. Divestment is financially prudent, morally imperative,
responsible policymaking, and the time for action is now.
PRIOR LEGISLATIVE HISTORY :
2015-2016: S.5873/A.8011-A
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS :
Undetermined
EFFECTIVE DATE :
Immediately.

S T A T E O F N E W Y O R K
________________________________________________________________________
4596--A
2017-2018 Regular Sessions
I N S E N A T E
February 21, 2017
___________
Introduced by Sens. KRUEGER, ADDABBO, ALCANTARA, AVELLA, BAILEY, BRES-
LIN, CARLUCCI, COMRIE, DILAN, HAMILTON, HOYLMAN, MONTGOMERY, PARKER,
PERALTA, SANDERS, SAVINO, SERRANO -- read twice and ordered printed,
and when printed to be committed to the Committee on Civil Service and
Pensions -- recommitted to the Committee on Civil Service and Pensions
in accordance with Senate Rule 6, sec. 8 -- committee discharged, bill
amended, ordered reprinted as amended and recommitted to said commit-
tee
AN ACT to amend the retirement and social security law, in relation to
limitations on investments of public pension funds
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. This act shall be known and may be cited as the "fossil
fuel divestment act".
S 2. Section 423 of the retirement and social security law, as amended
by chapter 770 of the laws of 1970, is amended to read as follows:
S 423. Investments. [a.] 1. On and after April first, nineteen
hundred sixty-seven, the comptroller shall invest the available monies
of the common retirement fund in any investments and securities author-
ized by law for each retirement system and shall hold such investments
in his name as trustee of such fund, notwithstanding any other provision
of this chapter. Participating interests in such investments shall be
credited to each retirement system in the manner and at the time speci-
fied in [paragraph] SUBDIVISION two of section four hundred twenty-two
of this article.
[b.] 2. (A) To assist in the management of the monies of the common
retirement fund, the comptroller shall appoint an investment advisory
committee consisting of not less than seven members who shall serve for
his term of office. A vacancy occurring from any cause other than expi-
ration of term shall be filled by the comptroller for the remainder of
the term. Each member of the committee shall be experienced in the field
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD05953-02-8

S. 4596--A 2
of investments and shall have served, or shall be serving, as a senior
officer or member of the board of an insurance company, banking corpo-
ration or other financial or investment organization authorized to do
business in the state of New York. The committee shall advise the comp-
troller on investment policies relating to the monies of the common
retirement fund and shall review, from time to time, the investment
portfolio of the fund and make such recommendations as may be deemed
necessary.
(B) The comptroller shall appoint a separate mortgage advisory commit-
tee, with the advice and consent of the investment advisory committee,
to review proposed mortgage and real estate investments by the common
retirement fund. In making investments, as authorized by law, the comp-
troller shall be guided by policies established by each committee from
time to time; and, in the event the mortgage advisory committee disap-
proves a proposed mortgage or real estate investment, such shall not be
made.
(C) No officer or employee of any state department or agency shall be
eligible for membership on either committee. Each committee shall
convene periodically on call of the comptroller, or on call of the
chairman. The members of each committee shall be entitled to reimburse-
ment for their actual and necessary expenses but shall receive no
compensation for their services.
3. (A) NOTWITHSTANDING ANY PROVISION OF LAW TO THE CONTRARY, THE COMP-
TROLLER SHALL NOT HAVE THE POWER TO INVEST THE AVAILABLE MONIES OF THE
COMMON RETIREMENT FUND IN ANY STOCKS, DEBT OR OTHER SECURITIES OF ANY
CORPORATION OR COMPANY, OR ANY SUBSIDIARY, AFFILIATE OR PARENT OF ANY
CORPORATION OR COMPANY, AMONG THE TWO HUNDRED LARGEST PUBLICLY TRADED
FOSSIL FUEL COMPANIES, AS ESTABLISHED BY CARBON CONTENT IN THE COMPA-
NIES' PROVEN OIL, GAS AND COAL RESERVES. THE COMPTROLLER SHALL, IN
ACCORDANCE WITH SOUND INVESTMENT CRITERIA AND CONSISTENT WITH HIS OR HER
FIDUCIARY OBLIGATIONS, DIVEST ANY SUCH STOCKS OR OTHER SECURITIES WHETH-
ER THEY ARE OWNED DIRECTLY OR HELD THROUGH SEPARATE ACCOUNTS OR ANY
COMMINGLED FUNDS. DIVESTMENT PURSUANT TO THIS SUBDIVISION MUST BE
COMPLETED WITHIN FIVE YEARS OF THE EFFECTIVE DATE OF THIS SUBDIVISION,
WITH THE EXCEPTION OF COMPANIES ENGAGED IN THE MINING, EXTRACTION OR
PRODUCTION OF COAL, DIVESTMENT FROM WHICH MUST BE COMPLETED NO LATER
THAN ONE YEAR AFTER THE EFFECTIVE DATE OF THIS SUBDIVISION.
(B) THE COMPTROLLER SHALL BE PERMITTED TO CEASE DIVESTING FROM COMPA-
NIES UNDER PARAGRAPH (A) OF THIS SUBDIVISION, REINVEST IN COMPANIES FROM
WHICH IT DIVESTED UNDER PARAGRAPH (A) OF THIS SUBDIVISION, OR CONTINUE
TO INVEST IN COMPANIES FROM WHICH IT HAS NOT YET DIVESTED UPON CLEAR AND
CONVINCING EVIDENCE SHOWING THAT AS A DIRECT RESULT OF SUCH DIVESTMENT,
THE TOTAL AND AGGREGATE VALUE OF ALL ASSETS UNDER MANAGEMENT BY, OR ON
BEHALF OF, THE COMMON RETIREMENT FUND BECOMES OR SHALL BECOME: (I) EQUAL
TO OR LESS THAN NINETY-NINE AND ONE-HALF PERCENT; OR (II) ONE HUNDRED
PERCENT LESS FIFTY BASIS POINTS OF THE HYPOTHETICAL VALUE OF ALL ASSETS
UNDER MANAGEMENT BY, OR ON BEHALF OF, THE COMMON RETIREMENT FUND ASSUM-
ING NO DIVESTMENT FROM ANY COMPANY HAD OCCURRED UNDER SAID PARAGRAPH (A)
OF THIS SUBDIVISION. CESSATION OF DIVESTMENT, REINVESTMENT OR ANY
SUBSEQUENT ONGOING INVESTMENT AUTHORIZED BY THIS SECTION SHALL BE
STRICTLY LIMITED TO THE MINIMUM STEPS NECESSARY TO AVOID THE CONTINGENCY
SET FORTH IN THE PRECEDING SENTENCE. FOR ANY CESSATION OF DIVESTMENT,
AND IN ADVANCE OF SUCH CESSATION, AUTHORIZED BY THIS SUBDIVISION, THE
COMPTROLLER SHALL PROVIDE A WRITTEN REPORT TO THE ATTORNEY GENERAL, THE
SENATE STANDING COMMITTEE ON CIVIL SERVICE AND PENSIONS, AND THE ASSEM-
BLY STANDING COMMITTEE ON GOVERNMENTAL EMPLOYEES, UPDATED SEMI-ANNUALLY
S. 4596--A 3
THEREAFTER AS APPLICABLE, SETTING FORTH THE REASONS AND JUSTIFICATION,
SUPPORTED BY CLEAR AND CONVINCING EVIDENCE, FOR ITS DECISIONS TO CEASE
DIVESTMENT, TO REINVEST OR TO REMAIN INVESTED IN FOSSIL FUEL COMPANIES.
(C) WITHIN SIXTY DAYS OF THE EFFECTIVE DATE OF THIS SUBDIVISION, THE
COMPTROLLER SHALL FACILITATE THE IDENTIFICATION OF FOSSIL FUEL COMPANIES
FROM WHICH THE COMMON RETIREMENT FUND IS REQUIRED TO DIVEST UNDER PARA-
GRAPH (A) OF THIS SUBDIVISION, AND FILE A COPY OF THIS LIST WITH THE
ATTORNEY GENERAL, THE SENATE STANDING COMMITTEE ON CIVIL SERVICE AND
PENSIONS, AND THE ASSEMBLY STANDING COMMITTEE ON GOVERNMENTAL EMPLOYEES.
ANNUALLY THEREAFTER, THE PUBLIC FUND SHALL FILE A REPORT WITH THE ATTOR-
NEY GENERAL, THE SENATE STANDING COMMITTEE ON CIVIL SERVICE AND
PENSIONS, AND THE ASSEMBLY STANDING COMMITTEE ON GOVERNMENTAL EMPLOYEES
THAT INCLUDES: (I) ALL INVESTMENTS SOLD, REDEEMED, DIVESTED OR WITHDRAWN
IN COMPLIANCE WITH PARAGRAPH (A) OF THIS SUBDIVISION; AND (II) ALL
PROHIBITED INVESTMENTS FROM WHICH THE COMMON RETIREMENT FUND HAS NOT YET
DIVESTED UNDER PARAGRAPH (A) OF THIS SUBDIVISION.
S 3. This act shall take effect immediately.

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